Laws and Regulations

In order to create a favorable investment environment and encourage foreign investment, the Chinese government has made great efforts to improve the legislation on foreign investment since it adopted a policy of reform and opening up in 1978.

China's legal system is rapidly maturing in the area of foreign investment regarding the establishment, operation, taxation, foreign exchange management, dispute settlement, termination and liquidation of foreign-invested enterprises. A series of laws and regulations have been implemented to protect the legitimate rights and interests of both domestic and overseas investors.

China has also entered into bilateral investment treaties with more than 130 countries and regions to help protect their investors' interests. By the end of May 2011, China had signed bilateral agreements on the Avoidance of Double Taxation with 96 countries, and taxation arrangements with its Hong Kong and Macao special administration regions.

Beijing has also, in light of national laws, regulations or ministerial rules, formulated different supplementary provisions and local policies to regulate and boost foreign investment.

A. Major laws and regulations for foreign investment in China:

1. Specific Laws and Regulations on Foreign Investment

1) The Law of the People's Republic of China on Chinese-Foreign Equity Joint Ventures (Revised 2001) and its implementation rules (Revised 2001);

2) The Law of the People's Republic of China on Chinese-Foreign Cooperative Joint Ventures (Revised 2000) and its implementation rules (1995);

3) The Law of the People's Republic of China on Wholly Foreign-Owned Enterprises (Revised 2000) and its implementation rules (2001);

4) The Provisions on Guiding Foreign Investment Direction (2002); The Catalogue of Industries for Guiding Foreign Investment (Revised 2011); The Catalogue of Advantageous Sectors for Foreign Investment in Central and Western Regions of China (Revised 2008);

5) The Law of the People's Republic of China on the Protection of Investment of Taiwan Compatriots (1994) and its implementation rules (1999);

6) The Provisions on Mergers and Acquisitions of Domestic Enterprises by Foreign Investors (Revised 2009);

7) The Provisions on the Establishment of Investment Companies by Foreign Investors (Revised 2004);

8) The Interim Provisions Concerning Some Issues on the Establishment of Joint Stock Limited Companies with Foreign Investment (1995);